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Former RRH co-CEOs given $12.8 million in 2014 payments

Rochester Regional Health gave former co-CEOs Mark Clement and Warren Hern a combined $12.8 million send off when the pair stepped down last year.

In 2014, Clement collected $5.3 million and Hern received $7.5 million, the health system reported to the Internal Revenue Service in Form 990s filed this week by RRH and its component organizations.

As detailed on the system’s IRS filing, components of Clement’s compensation were: $750,257 in base salary; a $714,172 bonus; $1.8 million in unspecified other reportable compensation; $4,551 in non-taxable benefits; and $2.1 million in retirement and deferred compensation.

Hern’s compensation included base pay of $666,415; a $209,216 bonus; $55,267 in unspecified other reportable compensation; $5.6 million in retirement pay and deferred compensation; $5,234 in non-taxable benefits.

Hern and Clement additionally are each participants in defined-benefit pension plans, which system officials declined to detail.

Hern’s 2013 compensation as Unity CEO was $990,795, that system’s 2013 IRS filing shows. RGHS’ 2013 filing shows Clement’s compensation as totaling $2.2 million in that year. 
Previously CEOs of Rochester General Health System and Unity Health System Clement and Hern became co-leaders of RRH when it was created in a merger of the two systems that was completed on July 1, 2014.
The 2014 merger created a system with roughly 13,000 workers and three hospitals. It consisted of Rochester General and Unity hospitals in Monroe County, Newark-Wayne Community Hospital in Wayne County, a score or so of medical practices and other affiliates such as nursing homes.

RRH revenues in 2014 totaled $1.69 billion. It finished the year with a $46.1 million surplus, achieving an operating margin of 2.3 percent of revenues.

After further mergers completed this year with Clifton Springs Hospital and Clinic in Ontario County and United Memorial Health System in Genesee County, RRH gained some 2,000 more workers. It has been the region’s second-largest employer since the 2014 merger.

The system is running in the black this year but would not be ready to publicly report 2015 financial results until sometime in the first quarter 2016, Chief Financial Officer Thomas Crilly said.

Clement and Hern had agreed to step down in favor of a new CEO as part of the RGHS/Unity merger talks. They served as RRH’s co-CEOs until the system’s current CEO, Eric Bieber M.D., took over on Nov. 30 of last year.

Clement last April became president of the four-hospital TriHealth system in Cincinnati, his native city.

The 2014 RRH 990s show Bieber’s compensation for the two months he served in that year as totaling $290,393.

Other top RRH earners in 2014 were Chief Operating Officer Robert Nesselbush, who earned $1.6 million; Chief Administrative Officer Hugh Thomas, whose compensation totaled $1.3 million; and Crilly, with compensation of $702,866.

In 2013, Thomas earned $822,855 as senior vice president and corporate counsel at RGHS. Unity paid Crilly, then its CFO, $427,333 in 2013. RGHS employed Nesselbush as its CFO in 2013 but did not report his compensation in its IRS filing for that year. 
(c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.


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